RUNNING HEAD: LOGISTICS MANAGEMENT

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Logistics management

Introduction

Logistics is a business framework which is used to manage material, capital flows,

information and services, and which encompasses communication, information transfer and
control structures which are essential in the current business environment (Naqib Daneshjo,
& Vladimir Stollmann, 2013). This report will give details on the role of logistics and how
they interrelate with other functional areas at Singapore Cement Manufacturing Company
(Pte) Ltd to ensure that they reach their goals. This report will demonstrate how logistics
affect other business areas such as marketing, accounting and finance and production as well
as its contribution to the organisations performance at large.

Singapore Cement Manufacturing Company (Pte) Ltd is a Singapore based company

owned jointly by Taiheiyo Singapore Pte Ltd and Hong Leong Asia Ltd. The company was
founded in 1958 and started by packing imported cement and continues to deliver bulky
amounts of cement for technical uses. The company is the only distributor of ONODA, a
Japanese brand, in Singapore. The company has installed computerised systems of weighing
and loading for efficiency and has dedicated staffs that provide quality services in deliveries
to customers. The company aims at meeting customer needs more consistently in their
strategies to supply Portland cement among brands.

The company deals in three major cement brands which are Portland Fly-ash Cement
(CEM II/B-V), Portland cement (CEM I), and Onoda White Cement and ensures that it
provides quality products to customers through in-houses testing procedures of imported
materials and other brands. SCMC commits to provide safety in the working environment of
its employees and the general public and also is in the mission to improve their lifestyle
quality through work methods and policy reviews. SCMC is the longest serving cement
manufacturer in Singapore and boasts in its capacity to have manufactured and supplied
quality products to many private projects as well as those in the public sector.

The interfaces

Logistics and the three core functional areas, that is, production, accounting and
finance as well as marketing, are directly related and supplement each other. Logistics play a
unique role in all the three areas. Logistics link all these functional areas to form a chain.
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Production and Logistics

In production, logistics are employed to ensure that raw materials are supplied in
time, in the right quantity and quality, and in desirable prices (Staff, 2016). Application of
logistics in production also ensures that the best location is selected for the process. Logistics
take care of storage of raw materials and the finished commodities. In Singapore Cement
Manufacturing Company (Pte) Ltd, logistics are applied to procure raw materials, production
machines, and labour force; factors which are core in the production stage.

Marketing and Logistics

Logistics play a critical role in the area of marketing as it enables the marketers to
carry out their tasks more efficiently. As the Logistics manager I have to look into the
requirements of the marketers in areas like supplying commodities and service providers.
Majorly, I ensure that marketing materials are availed to the marketers as well as procuring
advertising firms. As the logistics manager I normally advise the marketing department to
recruit more distributors of their commodities which results to more sales. Improved sales
returns ensure that there is increased income to the organisation (Fugate, Mentzer, & Stank,
2010)

Accounting and finance and Logistics

Accounting and finance department is an important arm of any organisation, which

works hand in hand with the logistics management (Schulz, J. 2016). Accounting and finance
department ensures that all financial support required by the logistics department are met in
time to facilitate good performance of the departments. On the other hand logistics
department plays an important role in the decision making processes of the accounting and
finance department. As the Logistics department we regularly provide such information as to
which supplier has more favourable quotations. This helps the whole organisation to cut
down production and distribution costs. These two departments complement each other.

Order cycle analysis

Order cycle refers to the period an organisation takes to sell commodities to reach an
order target. Target order majorly is facilitated by a particular order size which allows the
organisation get better terms to enable it to competitively deal in the products. An
organisation should choose an order cycle which is more suitable to avoid overstocking of
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products, out-of-stock situations and also delays in products delivery (Naqib Daneshjo, &
Vladimr tollmann, 2013). In Singapore Cement Manufacturing Company (Pte) Ltd there
exists as many order cycles as there are suppliers due to the inventory requirements of the
organisation which are highly determined by the dynamics of the markets. Diversified order
cycles ensure that the organisation meets the needs of the market at different points of
demand.

Singapore Cement Manufacturing Company (Pte) Ltd does not depend on the same order
cycle for long period so as to meet the changing market environment and its inventory
requirements. The organisation reduces or increases the amount of time of supply for
particular suppliers depending on the prediction of the future market environment. In order to
improve on delivery of orders by suppliers, the organisation undertakes activities such as
building of ports and terminals to harbour fleets and trucks which are essential in supplying
and distribution of merchandise.

Figure 1: Order Cycle, Customers' Perspective

Figure; Courtesy
The organisation, also, add value to the order of cycle and the trade at large through
developing logistical capabilities to empower them to source for commodities, store them,
blend and deliver to the clientele.

Other factors which influence the order cycles and which Singapore Cement Manufacturing
Company (Pte) Ltd has taken care of include;
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i) Risk management

The organisation has created processes and systems which allow them to manage very
wide range of financial risks. The business model plays a major role in this particular area as
it is quite resilient and can handle volatile market environment. (Yoon, Yildiz, & Talluri,
2015)

ii) Client support

Customer base of this organisation largely determine order cycles and thus it has been
granted support via integrated solutions combining trading, infrastructure, and finance in
physical sector. This ensures that clients are able to easily access products and services and
thus their satisfaction is guaranteed.

iii) Markets sustenance

The organisation strives to conduct its activities which benefit the local communities
and in a manner that the large society appreciates. This ensures that there is social and
economic development.

Order cycle can be executed on daily, weekly, monthly or yearly basis depending on
the type of commodity, its value and the quantity the commodity (Kantarelis, 2014). The
scales of production in a company, also, determine the period of time an order can be made.
The table below shows an illustration of a weekly order cycle of raw materials (Naqib
Daneshjo, & Vladimr tollmann, 2013).

Mon Tue Wed Thur Fri Sat Sun

6:00 am Suppliers Deliveries Products Online Shopping Shopping
Manufacturing gather products are made are posted shopping open open
starts and sell to the online begins
manufacturing
8:30pm plant Customers
Manufacturing pick up
closes

Table 1: Order Cycle of Raw Materials

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Inventory management

Inventory management is a process in which movement of stocks and other units in an

organisation are monitored for evaluation and determination of future production and market
requirements. Inventory management ensures that stock flows well. This practice helps the
organisation to avoid losses through goods expiration. Excellent inventory system has to
have;

a) A clear starting count

b) Measure units
c) Good policies
d) Unmistakable numbers
e) Location labels
f) Labour force which adhere to the policies set and,
g) Item descriptions

Inventory management enables an organisation to have undisrupted supply of

commodities even when there is undersupply (Schulz, J. 2016). However, inventory
management may be costly if the logistics are not well taken care of, due to space and labour
force requirements. Effective inventory management system must ensure that;

i) stocks are at the right place

This applies mostly where we have several sales channels and one has to fulfil all
orders from different pools of stock. One has to consider a system of inventory management
which tracks stock movement across the sales channels. Automation in this case will be
important to avoid the hustle of tracking stocks manually. It can be challenging especially
when one has to keep some commodities at on channel where there is slow. This will
automatically call for shipping the stocks to anther channel at an extra cost.

ii) stocks have the right price

An organisation can ride on price breaks when an inventory is well managed.

Inventory managers can observe the market trends and acquire commodities when they are at
high supply since their prices tend to go down. In this case, the organisation will be able to
offer competitive prices. However, it could prove a challenge to the organisation when it has
to spend more money on stocks due to the pressure of acquiring more at a cheaper price. This
may lead to unplanned spending and miss the required capital to run other business
requirements.
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iii) stocks are at the right level

Stocking the right amount will ensure that there is steady supply of commodities. In
the event where stocks are inadequate, clients may turn to other providers and make the
organisation run out of business. On the other hand, when stocks are oversupplied, the
organisation may incur more costs looking for more space and labour force to handle it.
Inventory management will help to regulate stock supply and therefore ensure smooth
business environment. Inventories will provide some important data in decision-making
processes on when to reorder stocks and when to clear stocks.

iv) stocks are available at the right time

An organisation has to determine its reorder point in order to avoid the out-of-stock
situations. The inventory helps to determine this point in time to make orders. In order to
ensure timely shipping, the organisation has put in place mechanisms to especially through
the inventory management. Timely orders ensure that the organisation has enough space to
store the commodities as well as efficient ways of handling their stock. This process of timely
stocking is majorly facilitated by the logistics managers and the accounting and finance team.

Recommendations

As the Logistics manager at Singapore Cement Manufacturing Company (Pte) Ltd I would
recommend that;

i) In order to increase the customer base and subsequently the frequency of order
cycles, we need to determine our customers propensity to buy or cease to use our
products as outlined by the logistics regression model. This will also be a mileage
in the war against competition in the dynamic market ( Agresti & Alan, 2002).
ii) The company employs a strategic way of optimizing the number and size of its
storage space so to ensure that it meets the market demand with ease; partner with
suppliers and distributors to improve on operations.
iii) The company puts in place more tactical measures of procuring raw materials so
as to improve on returns.
iv) The company puts in place an automated inventory back-up system to help in the
event of malfunctioning of the inventory system.

Conclusion
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Logistics management is a core component to all trading and manufacturing

companies around the world. Logistics is uniquely the backbone of all the processes in
Singapore Cement Manufacturing Company (Pte) Ltd, in that it is able to carry out
productions more effectively. It also facilitates the marketing of commodities to the
customers. Logistics management give answers to the production and marketing departments
about the market requirements (Schulz, J. 2016). Mostly, logistics link the two departments to
yield the desired results. Logistics management brings a common ground for the accounting
and finance unit to work with the production unit as well as the marketing unit.

Order cycles are largely depended on logistics management. Logistics determine the
effectiveness of the order cycles through risk management, customer support activities, and
market sustenance (Ellram, 2012). On the other hand, inventory management also play a
critical role in the order cycles. Inventory management compliments order cycles by ensuring
that commodities are provided on time, at the right place, baring favourable prices and having
the right quantities. Thus, for a business venture to successfully compete in the market it must
incorporate logistics management in its processes either through outsourcing or an in-house
department. An organisation can choose whichever way will more cost- effective and reliable
in service provision.
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References

Agresti, Alan. (2002). Categorical Data Analysis. New York. Wiley

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Fugate, B., Mentzer, J., & Stank, T. (2010). LOGISTICS PERFORMANCE: EFFICIENCY,
EFFECTIVENESS, AND DIFFERENTIATION. Journal Of Business Logistics,
31(1), 43-62. http://dx.doi.org/10.1002/j.2158-1592.2010.tb00127.x

Kantarelis, D. (2014). Global Business and Economics Review. International Journal Of

Economics And Business Research, (1), 34 -37.Global Business and Economics
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Madsen, D. (2016). SWOT ANALYSIS: A MANAGEMENT FASHION PERSPECTIVE.

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Naqib Daneshjo, & Vladimr tollmann. (2013). Logistics systems and supply chain
management. International Journal of Interdisciplinarity in Theory and Practice, 2

Schulz, J. (2016). State of Logistics 2016: US Business Logistics Costs Slow Considerably
with 2.6% Growth. Logisticsmgmt.com. Retrieved 7 February 2017,
http://www.logisticsmgmt.com/article/state_of_logistics_2016_us_business_logistics_
costs_slow_considerably_with

Staff, L. (2016). The Evolving Role of 3PLs in Supply Chain Management.

Logisticsmgmt.com. Retrieved 7 February 2017, from
http://www.logisticsmgmt.com/article/the_evolving_role_of_3pls_in_supply_chain_m
anagement

Yoon, J., Yildiz, H., & Talluri, S. (2015). Risk Management Strategies in Transportation
Capacity Decisions: An Analytical Approach. Retrieved 7 February 2017